Office properties (yes, office!) got Manhattan’s biggest December loans

Lenders got behind ground-up projects, conversions, expiring CMBS debt

From left: Michael Dell with 25 Water Street, Alex Sapir with 261 Madison Avenue and Marc Holiday with One Madison Avenue
From left: Michael Dell with 25 Water Street, Alex Sapir with 261 Madison Avenue and Marc Holiday with One Madison Avenue (Getty, Edge Funds, Sapir Organization, SL Green)

Manhattan office properties were front and center for big lenders last month.

Wells Fargo financed a new, 1.4 million-square-foot office building in Flatiron, Michael Dell and Apollo got behind the nation’s largest office-to-resi conversion, and two lenders refinanced debt on office buildings in the CMBS market.

A couple of residential projects also got financing: one multifamily development on the Upper East Side and a condominium near Billionaires Row.

All told, lenders on the 10 largest deals parted ways with $2.4 billion last month — on par with amounts lent in the past two years.

Here are more details.

On the clock | $575M

The owners of One Madison Avenue, a 1.4 million-square-foot office redevelopment in Flatiron, secured $575 million in construction financing from Wells Fargo, which has originated $1 billion in loans for the project since 2020. A joint venture partnership among SL Green Realty, Hines and the National Pension Service of Korea, the project was estimated to cost $2.3 billion.

Conversion immersion | $415M

Michael Dell’s MSD Partners and Apollo Global Management have funded the purchase and redevelopment of the nation’s largest office-to-residential conversion, at 25 Water Street in the Financial District, to the tune of $536 million. That amount includes last month’s $415 million divided between senior loans and construction construction loans. Jeffrey Gural’s GFP Real Estate partnered with Metro Loft Management and Rockwood Capital to buy and transform the 1-million-square-foot office building into 1,200 rental units.

Two Bridges, two lenders | $266M

Extell Development refinanced a portion of One Manhattan Square, a residential tower at 252 South Street in Two Bridges, with $217 million from Bank of America and $49 million from Apollo Global Management. That includes a new $10 million mortgage and is secured by 355 units plus the building’s parking garage. The building — a combination of condominium and rental units — has 815 apartments.

Savoy, Harlem | $247M

Jeffrey Goldberg’s Fairstead refinanced the seven-building Savoy Complex, a residential campus in Central Harlem, with $247 million from Texas-based New Point Real Estate Capital. Fairstead, one of the country’s largest apartment landlords, co-owns the 1,802 affordable units in the complex with Artemis Real Estate Partners and C-III Capital Partners. In June, Fairstead began looking for a buyer willing to drop $400 million on the property, or $223,000 per unit. The refinancing includes a new $14 million mortgage.

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Double trouble | $200M

The Sapir Organization refinanced 260 and 261 Madison Avenue, twin office towers in Midtown South totaling 900,000 square feet, with $200 million from JPMorgan Chase. The loan replaced expiring CMBS debt. Facing a deadline to refinance, Alex Sapir had been looking for a buyer to spend $600 million on the properties, which were 81 percent leased as of March, according to Moody’s Investors Service. The buildings have been the subject of litigation, including with WeWork founder Adam Neumann, who personally guaranteed leases there.

Billionaires Row-adjacent | $170M

Rotem Rosen and partners landed $170 million in construction loans from Bank OZK for 126 East 57th Street, a condo development near Billionaires Row. Construction of the 180,000-square-foot project is underway with a completion date in 2025. Rosen, Indian billionaire Anand Mahindra and Israeli developer Zahi Hagag bought the site at the southeast corner of East 56th Street and Lexington Avenue in 2019 for about $555 per built square foot.

Oldie but goodie | $155M

The William Kaufman Organization refinanced its 560,000-square-foot office tower at 777 Third Avenue, between East 49th and East 50th streets in Turtle Bay, with $155 million from Signature Bank, including a new $15 million mortgage. Transamerica Corporation was the prior lender.

Pay dirt | $145M

Hersel Torkian’s Torkian Group picked up a $145 million construction loan from Valley National Bank on a quarter-acre lot at 250 East 83rd on the Upper East Side. The mixed-use project, at the corner of Second Avenue, is expected to rise 32 stories and yield 240,000 square feet with 128 residential units. Torkian bought the parcel in 2005 for $8 million.

Expired but not retired | $127M

Publishing magnate Peter Brant refinanced his 140,000-square-foot office building at 575 Broadway in Soho with $127 million from Citi Real Estate Funding and Societe Generale. The loan replaces expiring CMBS debt.

Hotel Lazarus | $95M

Oklahoma City-based Burnett Equities scored $95 million from Taconic Capital to refinance and renovate the Martinique New York hotel at 1260 Broadway between West 32nd and West 33rd streets in Midtown South. Burnett bought the 531-key hotel in 2021 for $55 million, a year after the leasehold owner died and the building fell into foreclosure. Hilton operates the hotel.

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